Snapshot: AUD/USD trades around $0.72, pressured by USD strength but primarily vulnerable to a squeeze given the crowded long positioning and RBA’s reluctance to commit to rate cuts. Bullock’s recent comments about inflation progress being “still uneven” highlight the RBA’s cautious stance. No domestic data catalysts until the RBA meeting on the 20th.
- Watch for a break below $0.7180, which could trigger a deeper correction given the stretched positioning.
- Risk: Any hawkish repricing of the Fed could amplify AUD weakness.
Bias into NY: Short AUD/USD. The crowded long positioning combined with the RBA’s cautious stance and the potential for a stronger USD suggest further downside, targeting $0.7150. A soft Q1 trimmed-mean CPI would alleviate some pressure, but that’s not yet in sight.